Affordable Care Act: Labor Strategies

By Liz Moughan

As an industry with one of the largest populations of part-time workers, retail stands to be hit the hardest by the changes required by the Affordable Care Act. Yet as retailers start planning, many of them simply don't know how to comply, and what the long-term effects will be. Unfortunately, there is no "one-size-fits-all" solution, and employers will have to carefully select a strategy that is right for them.

At first glance, the new law seems to be a no-win situation: Many companies find themselves hard-pressed to offset the rising costs involved with the ACA without triggering such negative outcomes as employee turnover, poor customer service and, ultimately, a loss in revenues and profits.

But there is good news. By using workforce management technology, retailers can improve workforce efficiencies that can help with more effective execution of their ACA strategy. They can achieve compliance, minimize the costs associated with the act and even focus on initiatives that can improve their business.

Today, improving the customer experience is a significant opportunity for retailers. In the customer's eyes, overall "value" now represents a combination of price and their personal experience while shopping.

Research shows that customers are now willing to pay 13% more for a good experience, which explains the recent trends of showrooms and other premium services. Remember that your workforce is largely responsible for delivering this experience, so retailers should make every effort to keep the employees who deliver it best.

No matter what strategy retailers select to meet the requirements of the ACA, they will face new costs and other potential business challenges. Yet by focusing on the workforce, and the frontline employees who can actually influence results, retailers can do more than just survive ACA — they can thrive.

While retailers have many choices when it comes to ACA compliance, most have indicated that they will pursue one of three options:

• Continue to provide healthcare coverage for all of their optin, full-time employees. But in doing so, they expect their costs to rise.

• Choose to not provide coverage and elect to pay the government's penalties for non-compliance.

• Alter the mix of full-time and part-time employees. Many retailers will attempt to alter the mix of full-time to part-time employees in a manner that produces an acceptable cost profile. (The average retail employee works an average of 31.6 hours today, which could make changing this mix difficult without losing productivity or causing the entire organization to suffer.)

No matter which option retailers choose, workforce management technology can help them minimize the costs and deliver better business results. Specifically, it can help in the following areas:

• Time and attendance: By automating time and attendance processes, retailers can reduce labor costs by enforcing pay rules — consistently and accurately — across the entire organization. Also, time and attendance solutions can help retailers examine past data to determine employees' full-time or part-time status based on average hours worked per week.

• Scheduling: Effective scheduling solutions enable managers to create the "best-fit" schedules that align labor with demand, while still complying to all applicable regulations. For compliance, scheduling solutions enable retailers to make intelligent scheduling assignments based on their ACA strategy.

For example, if the company is trying to maximize the use of part-time and full-time employees, they can use scheduling to optimize the workforce — both for their business needs as well as to strive to comply with the ACA's 30-hour threshold.

• HR and payroll: With HR and payroll solutions, retailers can automate benefits administration and gain real-time insight into employee benefit eligibility, improving compliance and reducing financial penalties. These solutions also apply rules, policies and regulations consistently across the board, simplifying complex processes and helping to ensure compliance with the ACA. They also can generate a complete audit trail to provide evidence of compliance efforts.

• Workforce analytics: The right reporting and analytics tools can help retailers monitor the workforce by analyzing schedules, time records and benefits enrollments in real time.

Additionally, to help determine the right ACA strategy, users can perform "what-if" scenarios to select the right course of action — provide benefits, pay fines or examine employee hours — going forward.

Liz Moughan is director of the retail and hospitality practice group at Kronos Inc. (kronos.com).

By using workforce management technology, retailers can improve workforce efficiencies that can help with more effective execution of their ACA strategy.